Forex Today: US-Iran ceasefire extension helps mood improve

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.08%	-0.11%	-0.10%	-0.06%	-0.18%	-0.39%	-0.11%
EUR	0.08%		-0.03%	-0.02%	0.03%	-0.10%	-0.32%	-0.03%
GBP	0.11%	0.03%		0.02%	0.07%	-0.05%	-0.27%	-0.00%
JPY	0.10%	0.02%	-0.02%		0.03%	-0.07%	-0.30%	-0.05%
CAD	0.06%	-0.03%	-0.07%	-0.03%		-0.10%	-0.32%	-0.06%
AUD	0.18%	0.10%	0.05%	0.07%	0.10%		-0.23%	0.03%
NZD	0.39%	0.32%	0.27%	0.30%	0.32%	0.23%		0.26%
CHF	0.11%	0.03%	0.00%	0.05%	0.06%	-0.03%	-0.26%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

President Trump also noted that the US' blockade on Iranian ports will remain in place as lifting it would undermine the prospects of a peace deal. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) reportedly attacked a container ship earlier in the day. After Wall Street's main indexes closed in negative territory on Tuesday, US stock index futures rise between 0.6% and 0.8% in the European morning on Wednesday. The US Dollar (USD) Index stays in the red below 98.50 after rising about 0.4% on Tuesday.

While testifying before the Senate Banking Committee on Tuesday, Kevin Warsh, US President Donald Trump's nominee to replace Jerome Powell as the next chair of the Federal Reserve (Fed), noted that he doesn't agree with the view that the inflation overshoot is due to tariffs and argued that a smaller ballance sheet would help with lowering rates and inflation, while allowing the economy to get stronger.

The data published by the UK's Office for National Statistics (ONS) showed on Wednesday that annual inflation, as measured by the change in the Consumer Price Index (CPI), rose to 3.3% in March from 3% in February, as expected. In this period, the core CPI rose 3.1%, compared to 3.2% in February. GBP/USD largely ignore inflation figures and was last seen trading marginally higher on the day near 1.3520.

EUR/USD holds steady at around 1.1750 in the early European session on Wednesday following Tuesday's 0.4% drop.

USD/JPY moves sideways above 159.00 in the European morning. The data from Japan showed that Exports grew by 11.7% on a yearly basis in March, while Imports increased by 10.9%.

Gold (XAU/USD) lost more than 2% on Tuesday and touched a fresh weekly low below $4,670. XAU/USD stages a rebound and trades slightly above $4,750 early Wednesday.

Risk sentiment FAQs

What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets?

In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

What are the key assets to track to understand risk sentiment dynamics?

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

Which currencies strengthen when sentiment is "risk-on"?

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

Which currencies strengthen when sentiment is "risk-off"?

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.